Boeing Wins $1.3 Billion Order for 737s From China's Okay AirBloomberg News
Carrier will decide on first wide-body purchase by end-2016
Boeing order comes amid concerns of slowdown in Asia ex-China
Boeing Co. secured a $1.3 billion order for narrow-body planes from Okay Airways, with the Chinese regional carrier set to decide on its first wide-body order by the end of the year as it seeks to expand internationally.
Okay Air agreed to buy 12 single-aisle 737s, with an option to purchase eight more, Chicago-based Boeing said in a statement distributed at the Singapore Airshow Wednesday. The Chinese carrier, which is headquartered in Beijing and counts Tianjin as its hub, is purchasing eight 737Max-8, three 737MAX-9 and one 737 NG900-ER.
The purchase on the second day of the Singapore Airshow comes amid speculation that the heyday of big orders from India and Southeast Asia is ending, and that airlines in the region might have to delay delivery of planes as economic growth slows. Boeing expects China to overtake the U.S. as the world’s biggest aviation market in 20 years.
Okay Air Chairman Wang Shusheng told reporters Wednesday that the airline needs more planes with its load factor at 90 percent. The carrier plans to fly to Hawaii and Fiji using wide-body planes, and will decide between Airbus Group SE’s A350 and Boeing’s 787 by the end of the year, he said.
In Pictures: Asia's Biggest Air Show
From plush private jets to the latest military aircrafts
Okay Air’s deal comes two months after Boeing landed an order for 110 planes valued at $10 billion in list prices from state-owned China Southern Airlines Co. In September, Boeing inked a deal to build a finishing plant for single-aisle planes in China.
China Eastern Airlines Corp., Air China Ltd. and other Chinese carriers will require about 6,330 new planes worth $950 billion in the next two decades, according to Boeing. That’s about 17 percent of the global total. Chinese airlines and leasing companies announced orders for some 780 planes valued at about $102 billion during last year alone.
Okay Air plans to increase international flights to 34 percent of its total by 2020, from the current 5 percent, Wang said. Its only international destinations currently are Thailand, Japan and Korea’s Jeju Island, using a fleet made up almost entirely of Boeing narrow-body planes. The airline is the first Chinese airline to order the 737 Max 9, according to Boeing.
— With assistance by Clement Tan, and Kyunghee Park